Coinbase (COIN) Considers Paying Interest on Stablecoin Accounts

Cryptocurrency, in general, is a strange frontier right now. This means a lot of new concepts showing up on a regular basis, and one such concept recently arrived at cryptocurrency giant Coinbase.

Cryptocurrency exchange Coinbase (NASDAQ:COIN) is considering paying interest on at least some of its accounts, an idea that CEO Brian Armstrong recently raised with the House Financial Services Committee.

What Happened: Cryptocurrency, in general, is a strange frontier right now. This means a lot of new concepts showing up on a regular basis, and one such concept recently arrived at cryptocurrency giant Coinbase.

Word from CEO Brian Armstrong suggests that Coinbase is considering the idea to pay interest on at least some of its accounts, a move that sent shares blasting up nearly 5% in Wednesday afternoon’s trading.

While the thought of earning 5% on a Bitcoin stash sounds like a novel prospect, that is not what Armstrong seems to have in mind with this push. In fact, while speaking to the House Financial Services Committee, Armstrong described the need to offer interest to those who hold stablecoins. Stablecoins are those coins that are pegged to a fiat currency or a commodity like gold. But Armstrong did not limit his suggested addition to just Coinbase.

Armstrong called for all cryptocurrency services to be able to offer interest to stablecoin holders.

Armstrong pointed out that Americans can earn about 4.5% on their money with Treasury bills, but only about 0.14% on savings accounts. Meanwhile, holding a stablecoin gets no interest at all. So Armstrong wanted to see legislation support the idea of offering interest on stablecoins to help draw users’ attention to them, especially since, by design, the surges in value that non-stablecoins offer is not there.

Support From X:

Meanwhile, a Coinbase user’s fight in the Supreme Court, with the Internal Revenue Service (IRS) coming for it over a matter of user data, got a little support today from Elon Musk’s X (NASDAQ:TSLA), formerly Twitter. The user claimed that his transaction data had been handed over by the IRS, which was part of an investigation that took on over 14,000 people.

X, for its part, filed a brief that called on the Supreme Court to not allow the government to access such data without having “proper legal justification,” reports noted. Now matters are largely in the Supreme Court’s hands, with reports suggesting that it coming down on the side of the user would “…limit how much access law enforcement has to user data.”

Coinbase Stock:

Turning to Wall Street, analysts have a Moderate Buy consensus rating on COIN stock based on 11 Buys and nine Holds assigned in the past three months, as indicated by the graphic below. After an 27.46% loss in its share price over the past year, the average COIN price target of $330.79 per share implies 80.99% upside potential.

See more COIN analyst ratings.